Welcome. Thanks very much for attending this webinar on the Climate Transition Plan. We're really proud of the work that we've done to lay out what climate change means for Centrica. It's not only a huge threat to society, but it's also a huge business opportunity for us. Our investments, as you'll see in the plan, are targeted at being green, effectively helping the climate transition. But we're not investing for ideological reasons. It's because it's such a great opportunity for Centrica. I'm fully behind this. The board is fully behind it, and hopefully, when you get a chance to both look at the plan and to listen to the webinar, you'll see that this makes great sense for Centrica, but it's also fantastic for the climate.
Now, I'm really sorry that I can't be there in person today, but I wanted to record a message just to let you know how much I support this and to also take the opportunity to introduce a document that I'm personally very proud of, that we're very proud of as a board, and also to introduce you to the team led by James Rushen, our Head of Environment, who's going to take you through what this means for Centrica and what this means for you as investors.
Welcome, and thank you for joining this webinar introducing Centrica's new Climate Transition Plan. My name is James Rushen, and I'm the Group Head of Environment for Centrica. Over the next 30 minutes or so, I want to take you through how we've approached developing our new plan and how our business model positions us to capture the opportunities we see in the journey towards net zero. We'll deep dive into our emissions and targets and also focus on key areas such as the just transition and our governance of the plan. Centrica has long been an advocate not only of corporate action on climate change but of transparent disclosures. In 2021, we were one of the first 20 companies in the FTSE 100 to publish a Climate Transition Plan, building on our People and Planet Plan, which contains our key environmental and social goals.
Since then, we've incrementally built up climate disclosures to meet investor expectations, including the early adoption of TCFD, and we've gone on to adopt good practice in key areas such as Paris-aligned advocacy. Our second plan builds on this foundation, and we've sought to align with the Transition Plan Taskf orce, or TPT, framework to produce a strategically rounded plan addressing our own emissions, responding to risks and opportunities, and supporting an economy-wide transition. As summarized here by our CEO, Chris O'Shea, who's been fully involved in its development, our plan reflects our latest thinking on achieving net zero targets, and we remain steadfast in our commitment to drive progress. We see opportunity in the transition, and we're investing for value, not ideology, and we're pragmatic in our plans.
We're also honest in that we don't have all the answers today, and importantly, that we rely on the actions of others and a range of dependencies to meet our goals. Now, I just want to say a few words on our business model and strategy. In line with the TPT, we've outlined our business model as a uniquely integrated energy company operating across the entire value chain through a variety of distinct but complementary businesses. When it comes to energy, we make it, store it, move it, sell it, and mend it. Upstream, we have mature infrastructure businesses in which we're investing for growth to build a low-carbon, reliable energy system, including renewable and low-carbon power generation, flexible peaking generation, and energy storage.
At the retail end, we have market-leading brands that are relentlessly focused on providing a leading customer service and experience, helping customers save money and decarbonize through innovative offerings. Finally, our optimization business completes the integrated business model: buying and selling energy, managing risks for the group, and building out the flexibility required for the future low-carbon energy system. Our plan addresses how we intend to decarbonize all of these elements at different paces and degrees based upon specific markets and energy security needs. It's important that we anticipate, understand, and react to external factors that could impact our business and our plans. As such, we regularly review the markets in which we operate and identify key trends and undertake scenario analysis from which we've identified these six key climate-related trends that present both risks and opportunities.
As you can see, they include a reduction in demand for fossil fuels over time, replaced by an increase in demand for renewable and low-carbon electrons and molecules. We expect our key markets to incrementally electrify, driven by the growth in low-carbon heating and transportation, in turn leading to a rise in the need for energy efficiency and optimization. Our Climate Transition Plan addresses how we plan to mitigate these risks and capitalize on the numerous opportunities that the transition presents to Centrica. Now, let me take you to our greenhouse gas emissions. First thing I would highlight, as shown on the right-hand side, is that we have been decarbonizing for a considerable period of time and have significantly driven carbon out of our business, exceeding a 70% reduction in our own emissions over the past decade.
Recognizing that some of this has been delivered through structural change, we've set targets which normalize for our positions and investments to ensure we're delivering sustainable savings, as you can see here, bottom right. The chart on the left illustrates the dominance of our Scope 3 emissions relating to the sale of gas and electricity to our customers, representing 90% of our value chain emissions. So this remains a key focus area for us. Overall, we've set carbon targets for 97% of our entire value chain emissions and are making good progress on the remaining 3%. Now, let's take a deeper dive into our targets. Starting with Centrica's emissions, we are proud to announce that we're bringing forward our Scope 1 and 2 net zero target by five years from 2045-2 040, a full decade ahead of the global 1.5-degree goal.
Additionally, we're increasing our interim reduction goal from 40%- 50% and bringing it forward two years to 2032. In recognition of best practice, we've provided extensive content in our plan on how we set our targets and, crucially, their alignment with science. I'd like to offer two key takeaways, if I may, from this chart. Firstly, you'll see that we plan to decarbonize Centrica significantly in the 2030s and this picture has improved over the last three years, giving us the confidence to be bolder with our targets. Indeed, by the mid-30s, we expect to be ahead of the 1.5-degree linear pathway shown here. My second point is that we need to manage the trade-offs between decarbonization, energy security, and affordability and this need has grown over recent years.
And so we continue to invest in areas such as rapid response gas power generation to help balance intermittent renewables and gas storage and LNG shipments to provide security of supply. These are vital services for the system and for our customers. However, as you can see, they push up our emissions in the near term. But I'll explain later the efforts we're making to manage those emissions down. As well as using cross-sector reduction pathways, we've employed credible third-party sectoral pathways to assess our target alignment with science across key areas of our business. Here, we look at our power generation emissions, which at around 50% of our Scope 1 and 2 is a key sector for us to focus on. The vast majority of these emissions come from our Whitegate Power Station in Cork, Ireland.
You'll see that for the remainder of this decade, we expect our emissions to stay relatively flat, given how essential Whitegate is in providing energy security for Ireland. However, we're already progressing plans to decarbonize the asset in the mid to late 2030s to meet the dark blue glide path shown here. Some of the slight emissions rise we predict this decade is from the development of small-scale gas peaking plants that provide crucial backup for intermittent renewables. Independent bodies like the UK Climate Change Committee and the National Energy System Operator have recognized the need for this technology to deliver an orderly transition, and this is one of the trade-offs we need to manage in our own emissions as we deliver system-wide decarbonization. On this next slide, we've examples of two other lines of business that are important in the midterm to aid the transition.
The left-hand chart shows forecast emissions from our gas production and storage business. Having committed to no more exploration for new oil and gas fields and the conversion of the Rough gas storage facility, we plan on achieving net zero by 2035 in these businesses, ultimately ahead of the Climate Change Committee net zero pathway. Another trade-off, however, can be seen in the expected short-term rise in emissions in the late 20s as we redevelop Rough to future hydrogen storage. Similarly, the right-hand chart displays our forecast emissions from LNG shipping. Recent geopolitical events and the natural decline of the U.K.'s gas reserves have underlined the need for energy security, including in the form of LNG. Equally, the role of natural gas in the energy transition is widely recognized, and we plan to grow our LNG business.
However, we're developing plans to reduce our shipping emissions rapidly to reach net zero by the mid-2030s through efficiency gains and fuel switching, ultimately ahead of the benchmark pathway. Best practice today requires organizations to lay out in detail the key levers they intend to pull in order to meet their stated carbon targets, and it really is key to the credibility of a Climate Transition Plan, so we've worked really hard to do just that through charts such as this, which shows the role of each business activity in reaching net zero and the relative contribution and timing. Achieving net zero requires an enterprise-wide transformation with every part of our business playing a role, but progressing at varying paces, with some playing a more significant role than others.
As you can see, our emissions reduction target for 2032 will primarily be achieved through the decarbonization of gas production, energy shipping, and baseload power, and beyond that, we will see progress in decarbonizing our gas storage business, our baseload power operations, and a decline in peaking generator load factors. Since our last Climate Transition Plan, we have significantly enhanced the ambition and credibility of our plans to decarbonize Centrica. This has allowed us to provide far more detail on those plans and develop a new suite of climate ambitions across all those key levers I just showed. In baseload power generation, we have set an ambition to be net zero between 2034 and 2039, involving technologies such as hydrogen or ammonia to power, carbon capture and storage, and renewable generation.
In gas production and storage, we're pursuing plans for our Rough asset to become Europe's largest clean hydrogen store and to convert the depleted gas reservoirs at Morecambe into a carbon capture and storage hub. Reflecting that, we have now new ambitions for both Spirit Energy and Centrica Energy Storage+ to be net zero by 2035. As mentioned before, we have a new ambition for LNG shipping to hit net zero by 2035 and our van fleet to be emission-free by 2030. Now, let me turn to our customers' emissions. We've reviewed our target to reduce customers' emissions by 28% by 2030 and hit net zero by 2050 and feel that this is still an ambitious and challenging target. This is primarily because we do not have full control over these emissions.
Governments have a critical role to play in stimulating new markets for low-carbon technology, and consumers themselves need to respond positively and at pace. Indeed, we've updated our analysis on how our customers' emissions might evolve over time, and we've shared our view that under current conditions, our key markets are likely to fall short of net zero by 2050, primarily due to slow progress in decarbonizing heating, as shown on the upper line on the graph here. But we know that we have a key role to play in improving this picture, in developing and marketing low-carbon energy solutions which meet our customers' needs and engaging policymakers to help create the right conditions, and that is what we're doing so that we can all reduce customer emissions along the lower line seen here, which remains our target.
Now, as for our own emissions, we have detailed the key levers we intend to pull in order to meet our customer carbon targets, as illustrated here. We've identified four key levers: transitioning to a low-carbon electricity grid, decarbonization of gas, energy efficiency, and fuel switching. As you can see, our 2030 target will primarily be achieved through decarbonization of the electricity grid with customers benefiting from renewable and zero-carbon power. We will also build our capability and scale in selling heat pumps and energy efficiency products. In the longer term, we'll see fuel switching of heating at scale. This will involve electrification, but also blending of low-carbon gas in the grid and potentially direct use of clean hydrogen on a regional basis, and as we are for our own emissions, we're increasingly taking action across all of these decarbonization levers to deliver our near and long-term customer targets.
And we've gone further than before and set new climate ambitions across the board to drive progress and hold ourselves to account. For example, we're aiming to supply 100% renewable or low-carbon power by 2030 in our supply businesses in the U.K. and Ireland. And we also want to see at least a third of our customers engaged in specific, flexible, and green energy tariffs. We want to help facilitate our customers' fuel switch from gas to electricity through products such as heat pumps. We aim to sell 20,000 per year by 2030, but continue to work with the government and customers to help create the right conditions to accelerate uptake. And if we see supporting policies and consumer behaviors develop rapidly, then we stand ready to up this ambition.
We also aim to have 5 million devices such as heat pumps, but also solar and batteries connected to our Hive platform by 2030, and crucially, to facilitate the transition, we will ensure that our engineers are well-equipped to install low-carbon technologies such as smart meters, heat pumps, and EV chargers. We have set a new ambition that 3,000 of our engineers will be provided green skills by 2030. Seen together here, I think our new suite of climate ambitions are incredibly powerful. They address all the key levers we need to pull in order to deliver on our carbon targets and climate transition plan, but we're clear in our plan that we cannot deliver on these ambitions alone. They're subject to dependencies that are not within our full control, and we rely on the actions of others, including governments and customers, to play their parts as we play ours.
We go into greater detail on these dependencies and the conditions we advocate for within our plan. But we're fully committed. These ambitions have been developed with the leaders of the business, with clear ownership and strong governance. We will ensure accountability through integrating into leadership incentive schemes, and we will report regularly and transparently on our progress. Our Climate Transition Plan quite rightly focuses on managing our Scope 1, 2, and 3 emissions. However, it is worth noting that we make significant contributions to the system-wide transition. And in line with the TPT recommendations, we explain our economy-wide approach. This slide provides some examples of these activities, which range from providing energy storage solutions for both electricity and gas to providing route-to-market and balancing services for renewable power. And as I mentioned earlier, many of these don't lower our emissions.
In fact, some increase our emissions, but they're all needed for the transition and our trade-offs that require management. It's important that our plan is integrated into our financial strategy and planning. This is another area where we've upgraded our disclosures. We have a strong track record of quantifying the financial risks and opportunities associated with climate through our annual TCFD disclosures, the strategic responses to which are embodied within our plan. Our plan is also fully embedded within our financial plans and balance sheet, which is strong and well-capitalized to support our investment needs. We've built on our plans to invest between GBP 600 million-GBP 800 million annually by setting an ambition to spend over 50% of our total investment between 2023 and 2028 on green activities. As you can see here, we're making good progress.
To categorize this, we use a company framework which builds on the foundation of the EU Taxonomy but allows flexibility where required. As I mentioned before, our plan is very much dependent on working with others across our value chain. This includes our business partners and our peers within the industry who we work with closely to complement our expertise to deliver everything from low-carbon infrastructure to innovative solutions for customers. Our climate ambitions are also highly dependent on policy conditions developed by governments. And it's important that we present Centrica's view of how to facilitate an orderly transition. We center our policy asks around three themes: security, affordability, and sustainability, which we outline in the plan. And finally, we continue to engage closely with investors to understand their expectations and secure their support for our transition plan.
Now, let me turn briefly to an aspect of our transition plan which is of huge importance to us, and that is the need for a just transition. Our view is that the transition to net zero will fail if we only focus on cutting carbon. Equal care and attention is needed to prioritize people alongside the planet to ensure a just transition. We believe that net zero presents immense opportunities to deliver carbon reductions in a way that can benefit all of society, whether that's customers and colleagues or communities and supply chain. These are the four key stakeholder groups that we continue to focus our efforts on. The customers, our research tells us, that 80% of homeowners are willing to adopt green technologies in their homes, but they require additional support to make their transition simpler and more affordable.
We use insights like these to shape our products, services, and support packages. On colleagues, net zero will require a fundamental shift in training and skills. We have the biggest single engineering team in both the U.K. and Ireland, and whilst best known for installing boilers today, as I've already mentioned, we've great ambitions on creating green jobs and upskilling colleagues to install heat pumps, EV charging points, smart meters, and Hive. Our Climate Transition Plan also details how we're helping communities on their path to net zero by bringing new opportunities to communities that host us and targeting engagement in areas where we can make the greatest difference, and also how we're working closely with our supply chain to transition to a greener future in a sustainable and ethical way by partnering responsibly and advancing action through collaboration. My final section is on culture and governance.
Strong governance is embedded across the full breadth of our business to ensure we have the right oversight to deliver on our net zero commitments. You can see on the left the governance structure we have established, which allows the board and its committees, alongside senior management, to integrate our Climate Transition Plan into key processes and strategic decisions from the top to the bottom of our business. This arrangement is supported by measures to assess and strengthen board capability on climate change, integrate delivery of our climate goals into incentive schemes, all underpinned by regular internal and external reporting of progress. Finally, our people are our heartbeat. So we've introduced our new purpose to ensure that our business culture and strategy is fully rooted in energizing a greener, fairer future.
Creating a culture where colleagues feel empowered and able to make a difference for people and planet in and beyond their job is really important to us. In doing so, we hope to build a happier and healthier team while amplifying positive impacts beyond Centrica. We're running colleague awareness campaigns that bring to life our purpose as well as our People and Planet Plan and our Climate Transition Plan while providing net zero training. Thanks for listening. I hope you found that overview of our new Climate Transition Plan helpful. We're now going to move to a Q&A session, where I'll be happy to answer any of your questions.
Thank you, James. I'm Fraser Jamieson, the Head of Investor Relations at Centrica. I hope everybody found that presentation useful to give you a sense of how Centrica thinks about climate change.
I hope you've also had a chance to look through the full Climate Transition Plan, which is available on our website. If you would like to ask a question, you'll find a button just below the presentation on the website. Please click that, enter your question, and then hit submit. We've got a couple of questions already through, so clearly at least some of you have figured out how to do that so far, and we look forward to getting more questions through in due course. Our first question is, why has Centrica chosen to accelerate its progress towards net zero and establish more ambitious targets? James.
Yep, thank you, Fraser. Hello everyone. Nice to see the questions coming in. Do keep them coming. So why have we chosen to accelerate our targets now? I think the first thing I'd say is because we think it's achievable.
By that, I mean in the three years since we first published our Climate Transition Plan, we've really advanced the strategic plans for our main assets and activities and our key emission sources. And as we are pivoting or moving Centrica toward a lower carbon future, frankly, we're driving carbon out of the business. These new targets reflect our commercial strategy. I think that's a really important point, actually. It goes with the grain strategically. We're setting more ambitious targets, not from a sort of ideological standpoint, but because, frankly, it just makes good business sense for us. I think the second point I'd also raise is that the climate debate right now, the ESG debate, has become quite complicated and in many ways quite divisive. We believe that now is not a time to waver. Now is actually a time to double down and show leadership.
It's really important for companies and for governments to show leadership in this space, and underpinning that is our continued view that the move toward a lower carbon economy actually represents huge opportunities for Centrica, so we just see this as making absolute sense for us as a business, and hopefully, it'll inspire others and, in particular, our customers to come on that journey.
Thanks, James. We've got another question here. Your charts are very useful. However, your midterm goals suggest a very back-loaded decarbonization profile. And actually, in the short term, Centrica's emissions are likely to rise. Can you please discuss in a bit more detail how you plan to achieve decarbonization of LNG shipping so rapidly between 2030 and 2032? Similarly, could you please explain what drives decarbonization of baseload power generation by 2032? It says 2023 here, but I think that's a typo.
Is it switching to hydrogen for Whitegate or lower load factors?
Okay. Thanks for that. Well, good question. There's a few components there, but I think actually it kind of really gets into a really important topic. So I'll address the sort of the bigger picture first. And that is the sort of near-term trajectory of some of our Scope 1 and Scope 2 emissions. Again, first thing I think I'd say is that we've always been really clear that the transition toward net zero is unlikely to be linear. We're going to have some years we overperform, some years we underperform. I think that's true for Centrica. I think that's true for many companies and indeed many countries. So this non-linear pathway.
We've also been very upfront in our Climate Transition Plan that we do expect some years of this decade where we may see an increase in our emissions, our Scope 1 and 2 emissions. Really, that's principally because we are trying to manage that trilemma of decarbonization, but also managing security of supply and affordability. Just to sort of bring out some specifics behind some of the increase in emissions, one area is we are investing in a small portfolio of rapid response gas-fired peaking engines. It's well understood that these are needed to back up intermittent renewables, which when we don't have wind, when the sun doesn't shine, we've been having some of those periods recently in the U.K., we need these rapid response assets, which today run on unabated natural gas, to frankly balance the load so we can meet the demand.
Governments want us to invest in these. Many other partners want us to. It's a responsible thing to do, so we are doing that, but it pushes our emissions up, unfortunately, in the near term. Equally, recent geopolitical events have shown that energy security for Europe, for the U.K., is actually more important today than ever, and so we're seeing an increase in demand for LNG. We're growing our LNG business. We're bringing it not just to U.K., Europe, but also other parts of the world, so it either helps energy security or, in fact, can decarbonize certain markets where coal is still on the system, so again, that does push our emissions up from shipping. It's needed, but we've got to manage those emissions in the near term, so I mean, just on LNG, so the question touches on our shipping ambition. It's a new ambition for us.
We think it's really important. It's quite aggressive. Absolutely. It's got some dependencies associated with it. I think the reason why we think we can do it is we're not a ship owner. We lease ships, so we're not always locked in to a certain ship or vessel for a long period of time. That allows us to bring on more and more efficient ships, and we can see the maritime industry is really trying to put its shoulder against decarbonizing that particular sector, so we're looking to bring on more and more efficient ships in the near term. In fact, the Climate Transition Plan quotes, I think it's maybe 23% improvement in or a reduction in carbon per nautical mile in our portfolio recently, so that's good. We're going to build on that.
But then in the future, we are going to be looking at perhaps ammonia-fired ships, hydrogen-fired ships, and other technologies as well. So we're already working with ship builders and owners for that particular sectoral sort of transition piece. And then similarly with the power side of things, yes, you'll see that we're looking to decarbonize Whitegate power station. In the early years, that will actually, as that asset falls down the merit order, as more and more renewables come on the system, we're just going to be running it less, lower load factors. But many of you will have already seen that we've embarked upon a plan to actually convert that asset, to extend the life of that asset beyond its current existing economic life, which is about in the mid-30s, primarily through switching perhaps to ammonia, hydrogen. We're partnering in that area for hydrogen production, hydrogen storage.
So we're already showing we're investing and making progress in that space. So the plans are evolving quite nicely. I think I'll leave that one there.
Thanks, James. The next question is around SBTi validation. Why don't we have SBTi validation for our targets?
It's a good question. So a number of years ago, we committed to have our targets validated by the Science Based Targets initiative. Some of you may know that since then, they've been working on their oil and gas sector guidance. That's quite heavily delayed. It's been delayed by a number of years now. And not long ago, they made a decision that they could not and would not validate targets of any business that had any activity associated with gas. So for us, gas production, gas retail, it basically means that SBTi are pausing the validation of our targets, which is fine.
So they need some time to develop their guidance. When that guidance is published, of course, we'll re-engage with them to then pursue validation if it makes sense. The one thing I would say, though, is that SBTI presents a very attractive, very credible way to demonstrate your targets are science-based. But it's not the only way you can go about that. So we've worked hard, actually, to try and use alternative methods. So in our Climate Transition Plan, we use net zero pathways. We've used the Science Based Targets initiative modeling itself because we can use their power sector and building sector, just not the oil and gas one. So we use SBTI and also the Climate Change Committee pathways, so on and so forth.
So we do try very transparently to show how our emission reduction glide paths align with science, both those well below two and 1.5 degree pathways.
Thanks, James. Next question is around politics to some extent. Do you think that the U.K. and Europe will stick to their net zero targets given the recent round of executive orders in the U.S.?
Yeah. I mean, this goes sort of back to my point around the ESG. The climate conversation has become rather complicated. Do I think that the U.K. and Europe will sort of row back their net zero targets? I actually don't think they will. I think the political will is there still. The cross-party unity is there. I think what's happening in the U.S., we'll have to see how it plays out. It's likely to be temporary in its sort of permanency.
And equally, I think we all know where the destination is. The pace of getting there and the timing of arrival is a cause to be debated. But the transition of most economies toward a lower carbon future is rolling. It makes commercial sense, financial sense. Customers, consumers are engaging. So I think, actually, it's a train that's already left the station. So for us, we're not in any way being distracted. And I don't think the markets in which we operate will be distracted either.
Thanks. Next one is around Scope 3 emissions. The majority of your Scope 3 emissions appear to come from emissions from gas, and you refer to slow progress decarbonizing heating. How does it follow that the decarbonization of electricity is where you see most of the decarbonization happening?
What do you need from the political, regulatory, market context, or from partners to make decarbonizing heat easier?
Okay. So I guess starting with the bigger picture, you'll see in the Climate Plan, the majority of our Scope 3 emissions, and in fact, the majority of our value chain emissions relate to our customers' use of gas and electricity. We can see clearly that the initial phase of decarbonizing the customer base will be through the decarbonization of electricity, that energy vector. Not just the electricity, but then also fuel switching for customers, moving them from gas boilers onto heat pumps. And of course, we're making great progress in that regard. Whilst we do that, we need to perfect and ramp up the solutions to enable the decarbonization of heating in the home. So as I say, we can get our customers from gas boilers onto heat pumps.
We're quite clear as well. Again, it's a very honest sort of picture we're trying to paint here. We don't think progress is quite on track to meet the net zero targets that we need to see in decarbonizing heat, and there's a number of reasons for that. There are quite a number of barriers, of course, to the adoption of air source heat pumps today in many of our markets. There's the upfront capital cost. They're more expensive than the incumbent technologies, such as the gas boiler. There's the running costs. We see electricity three or four times the price of gas per unit, so we need to see that addressed. There's the fabric upgrades you often need in the homes as well, and also, something I've mentioned that I don't think gets enough airtime is awareness as well, and I'll come back to that.
What do we need from the political, the regulatory actors here? I think we need to see a number of things. Firstly, to continue to provide subsidy and support, such as the Boiler Upgrade Scheme in the U.K. We're a strong supporter of that. Let's help address that capital cost. We've long been an advocate for removing some or all of the policy costs from electricity onto general taxation. We need to get electricity cheaper so that we can really stimulate the electrification of much of the economy, but including heating. We don't see that we should put that onto gas. We think that's regressive. Let's get it onto general taxation. And also that point about awareness as well. So the U.K. government had a target of 600,000 heat pump installs by 2028. I think last year we had about 60,000. So about 10% of that target.
We've only got three or four years to go. So I do think we're probably off track. But I was struck by some research I read the other day that said around 30% of the U.K. public didn't know what a heat pump was. So we spend our time sort of thinking about this stuff quite deeply, assuming everybody knows the sort of problem statement. I don't think they do, actually. I think we need a national awareness program to really bring people with us. So there's a lot that government can do. There's a lot that companies like us can do, and I think we are doing. So we're constantly engaging with government to try and help them create those conditions that we need to see.
Thanks, James. The next question is around the just transition. So it's great to see you've integrated just transition into your transition plan.
Have we considered looking at nature as a theme in the plan too?
We have. So the recognition, I think, of nature in not just how it's impacted by climate change, but also how it can provide solutions to help mitigate and adapt to climate change, of course, is growing. We see the work of the Taskforce on Nature-related Financial Disclosures growing in popularity. As a company, we are looking more and more at this. We've increased the content in our climate transition around nature and biodiversity. But I think we're ramping up slowly as a business. And really, because we actually don't have a big nature impact as a business, we're not a big landowner, we're not a big land user. However, we do recognize that we need to actually continue to improve in that space.
So I think you'll see more and more from us as we adopt best practice in that area.
Thanks, James. Next one is back onto net zero. What factors external to Centrica should investors be watching to understand whether our achievement of net zero might be achieved sooner than expected or be delayed? And the question then goes on to reference sort of political, regulatory, market, and technological factors.
I think it's a really important topic and actually something we've worked hard to expand upon in this year's Climate Transition Plan. That is the dependencies upon which our ambitions rely. We've engaged a lot with the investment community as we've developed this Climate Plan. And we hear very loudly from them that they would like us to be ambitious on our targets and our ambitions, but they recognize that there are significant dependencies.
So let's be clear about those and also be clear about what we're doing to try and influence in a positive way on those dependencies. So you'll see in the plan quite a lot of detail about many areas that we want to see progress in. And it can be everything from the points I made around helping the customer adopt low carbon heating to reducing the delays of getting grid connections for solar assets and many things in between. We've been very vocal about public EV charging infrastructure, for instance. Again, more specific areas around converting our Rough facility to store hydrogen. We really need to see some government support, maybe a regulated asset base there to help de-risk revenues.
We're ready to invest quite significant sums of capital into converting carbon-intensive assets that need to actually be clean assets playing a positive role in the net zero transition, but we need to see support from government. So I think, look at the plan. You'll see a lot in there, and what we're going to do is continue to be very transparent about the advocacy we undertake. We now have a repository on Centrica.com showing all of the advocacy we undertake. You'll see what we're talking about with government, and we'll report as well about how those dependencies evolve and whether they're going to be headwinds or tailwinds for our targets.
Thanks, James. Back onto heat pumps now. Question around the negativity on heat pumps.
Is it nearly achievable to deliver the targets that we've set out because this would obviously be a key component of our emissions reduction targets?
Yeah. I mean, I knew heat pumps would come up today. I mean, I've already said a bit about the sort of dynamic there, haven't I? So I probably won't repeat that too much. But we've got to address the capital costs. We've got to address the running costs. We've got to be very clear that we have quite an old, leaky stock of housing in this country. So we're absolutely going to need to bring our customer with us. I think it is achievable, but we need awareness, and we need the proper support mechanisms in place to allow it to happen. One thing I sort of would dive into a bit deeper is what Centrica are doing right now.
So to try and address these hurdles, these barriers, we have a price match guarantee out there. So we'll match any other credible, comparable quote on a heat pump to try and be price competitive. I think we were the first company also to bring out our Warm Home Performance Guarantee. So another barrier is, will a heat pump heat my home as well as my gas boiler? In recognition of that, once we've surveyed your home and agreed to certain performance criteria, if your heat pump isn't heating your home to the degree we said it would be, we will come back and we'll address it. And if not, we'll give you your money back. I think that's really powerful, actually. So we're trying to do what we can to stimulate uptake.
I think it's achievable, but we need all those actors to play their part, including the customer, to be open in adopting the technology.
Thanks. Next one is back to dependencies. And I think you've already outlined a few of those, but let me read through it. What do you see as the biggest challenge in achieving your transition ambitions? Is there a key dependency outside of your direct control that's front of mind? So this is perhaps around the prioritization or the importance of those different dependencies.
Yeah. So I think what I would say is on Scope 1 and 2, the reason why we have been bold in bringing forward our net zero target to 2040 and improving our midterm target is because we have much more control over those emissions.
We have a high level of confidence of staying pretty close to those glide paths we've laid out. And the upside, with, let's say, government support for some of the conversion of our assets to store hydrogen, for example, for carbon capture and storage, the upside is extension of life of those assets to play those kind of roles. But if we don't get that, it's not a significant risk to our glide paths. We still think we can decarbonize those assets anyway. I think the bigger dependency absolutely lies with Scope 3, and it comes back to the consumer, the customer. And I probably can't state it enough. We need to bring the customer with us. That needs awareness. That needs to make sure we do it with them, not to them, but also the government support.
And I think most immediately that is about us working with them and other players in the industry to try and make the clean grid by 2030 in the U.K. target a reality and also addressing that decarbonizing heat point I mentioned earlier.
Thanks. We've got quite a specific one now. The chart on Slide 20 suggests the majority of Centrica's Scope 1 and 2 emission reductions in the early 2030s will come from the depletion and decommissioning of aging oil and gas fields. Is there a reason why Whitegate switch from natural gas to ammonia cannot happen earlier?
Yes. And we debated this internally a lot. And that was, when should we aim for to get Whitegate to net zero? And you'll see in many of our major sort of asset-based businesses, we've been ambitious enough to say net zero by 2035.
Whitegate, we've got a range, 2034- 2039, a window of opportunity. So if all the stars align, it could be as early as 2034, 2035, which I think is very early. But we do need that window because of the amount of variables and the uncertainties around it. The things we're looking at for Whitegate are things like working with partners on green hydrogen production locally. Us and other partner industries in the area can be that sort of demand signal. We're working with offshore operators, wind for the generation of that green hydrogen, also offshore geological storage for that hydrogen, and also working with partners like Mitsubishi on ammonia and the turbines needed. So you can see there's a number of different avenues that we can take to decarbonize, and we're proceeding on all of those fronts.
We just need time to understand exactly which one will be commercially viable soonest, so hence that window. But I still think it's a pretty aggressive plan.
Thanks. Let me go on to the next one. Hi, James. Thanks for a great presentation. Good to see the improvement in the transition plan reporting. On Scope 3 and heat pumps, I'm wondering if you feel you need further government support for the rollout of heat pumps, and how do you see the rollout playing out post-2030? How do you expect to tackle the imbalance between the unit price of electricity versus gas?
Yeah. I mean, on that specific point, I mentioned it earlier. We have been advocating for some time that we do need to move the policy costs from electricity. In our view, best to put that onto general taxation. Putting it on gas can be regressive.
It can impact those who are least able to afford it, perhaps who have a high gas bill because of the state of their home, so let's get that onto general taxation. It really is critical, I think, to lower the unit price of electricity. How do we see heat pump rollout playing out post-2030? I mean, our view is, I think the early move will be electrified solutions, particularly. I think they probably will be the most common type of low carbon heating. We haven't really touched on hydrogen. That may play a role regionally and post-2030, but I think we need to really move quickly on heat pumps, perhaps regional use of hydrogen as we go, but I've said it before. I think it needs all those actors to play their part.
Companies like us with all those offers that really meet the needs of the customer, government with its support mechanism, customers with awareness and the sort of openness to adopt that technology.
Thanks. We have one final question on the board at the moment. If you would like to ask a question, please do that. As I mentioned earlier, there's a little button below the presentation. Click submit once you've written your question down. For the final question, as it stands, it's been reported that Centrica is mulling shutting down Rough gas storage again. If that happens, how material would it be for your emissions from gas production and storage? In other words, what's a rough proportion of rough in emissions? I assume that's a deliberate pun.
A lot of rough there.
Yeah.
So Rough, and it's in the Climate Plan.
I think Rough is around 200,000 tons of CO2 per year. That puts it at about 10% of our Scope 1 and 2, 10%-15%. Also, as we sort of plan A, is to continue to use Rough in the near term for methane storage. That will drive up our emissions slightly. Before then, we want to move to hydrogen storage. If we rapidly closed Rough, to answer the question squarely, it would probably address 10% perhaps of our Scope 1 and 2. It would also prevent some of the near-term rise in emissions. As you can see, that's a nice example, actually, of how sort of within our plans, there's sort of natural hedges.
If we do close Rough, we'd actually achieve our targets probably sooner, but actually, we see value in that asset long run in playing a role for net zero, particularly in the long-duration storage of green hydrogen. So that's what we're currently pushing hard for.
Thanks. We've got another question just came in. Why is the target on customer energy, Scope 3, not provided separately for gas and electricity? Are the two expected to decarbonize at the same rate, or we decarbonize all of electricity first and then move to customer gas?
Yeah. I mean, as I mentioned earlier, the early phase will involve the decarbonization of electricity in the majority. So today, we provide our customers with about 75% zero carbon electricity. We want to gradually ramp that up to 100% by 2030. At the same time, we will start to ramp up the decarbonization of gas.
If you think we're sort of phasing out the emissions of electricity and then gradually phasing out the emissions of gas as well. They overlap, but it's electricity first and then gas primarily post-2030.
Thanks. And another question has come through. We have been asking to move electricity subsidies onto the taxpayer, but governments cannot afford it, and subsidizing energy will encourage higher consumption. Gas for domestic consumption is arguably not taxed appropriately, which is why heat pumps are not being taken up. Surely, consumers are best placed to manage charges and become more efficient.
Yeah. Well, I mean, I'm glad you mentioned efficiency. You're absolutely right. Efficiency needs to play a role. It probably is not spoken about enough, or perhaps we do speak about it a lot, but we're not making enough progress in it.
So I would absolutely agree that we do need to improve the efficiency, the insulation of homes in the U.K. On whether we should tax gas, we're concerned about the impact on many of our customer base. We do think that could be regressive. It is something that can be done. Absolutely. I understand that. But we just need to be really careful that we don't open up social inequality as we do that.
Thank you. And yeah, questions keep trickling in. How confident are you in the role of new nuclear in decarbonizing the grid? Delays and funding challenges seem endemic. What opportunities are you seeking in this technological pathway? Are small modular reactors a technology you'd consider for investment in the U.K.?
Yeah. I mean, just briefly, so we're on record. Obviously, we're an investor in nuclear today.
We're on record that we would be open to further investment in grid-scale, large-scale nuclear. We think it absolutely has a role to play. Zero carbon, baseload power is going to be important. I think the modular reactors are very interesting. We're watching that closely. We've not said anything about any investments yet, but I think it's definitely one to watch.
Thanks, James. And I think also worth mentioning on that one that we typically won't be taking technology risk. We are agnostic, not ideological about different technologies, but clearly, as these things mature, hopefully, lots of opportunities for investment across the board.
Yeah.
Thank you, everybody. I don't think we have any more questions. If you do have questions that haven't been answered, please do get in touch either with James and his team or through the investor relations team. I'd like to thank everybody for joining us today.
I hope what you have seen is how seriously Centrica takes its climate ambitions and all of the work that we have done around this second climate transition plan. Thank you very much for joining, and speak soon.